[an error occurred while processing this directive]
Press ContactsPress Archive

Novell Reports Strong Fourth Fiscal Quarter 1996 Results

17 Cents Earnings Per Share On $384 Million Revenue

Orem, UT -- November 26, 1996 --Novell, Inc. (NASDAQ:NOVL) today reported revenue of $384 million and net income of $59 million for its fourth fiscal quarter ended October 26, 1996. Earnings per share were $0.17 on 346 million weighted average shares outstanding. These results compare with year-ago net income of $59 million or $0.16 per share and revenue of $481 million. Prior-year results include contributions from product lines that have since been discontinued or sold.

The first comparable period following Novell's divestiture of its personal productivity applications and UnixWare product lines and the company's reduction of channel inventory was the third fiscal quarter of 1996. In that quarter, Novell reported revenue of $365 million and net income of $59 million or $0.17 per share.

John A. Young, Novell chairman, said, "We're pleased that the business changes Novell has been implementing all year are having their effect on financial results. In the fourth fiscal quarter of 1996, the company achieved slightly greater profitability on almost $100 million less revenue than in the year-earlier quarter. Sequentially, revenue growth of $19 million, or 5 percent, over the third fiscal quarter of 1996 reflects the improving nature of Novell's ongoing network software business."

"We plan to move rapidly through this transition period as we position the company to address the Internet/intranet markets. Our actions continue to be directed at energizing the company for profitable revenue growth."

Novell president Joseph A. Marengi said: "The sequential gain in fourth quarter revenue was driven by strong market demand for new versions of our major products. We saw significant growth in Novell server software revenue, up $32 million or 15 percent sequentially to $247 million. Of this, revenue from our new directory-enabled IntranetWare full service intranet platform and NetWare 4 increased 38 percent to $181 million from the third quarter. In addition, our new GroupWise 5 E-mail and collaboration system, the November Comdex winner of PC Computing's 1996 Most Valuable Product Award, increased 24 percent sequentially. ManageWise 2.1, Novell's market leading, PC-based network management software, grew 18 percent from the prior quarter."

"Looking forward, we are advancing our strategy to establish Novell Directory Services (NDS) as the de facto industry standard for the rapidly expanding Internet/intranet markets. To promote mass adoption of NDS across all server platforms, we are distributing our directory to major UNIX providers today and to system providers delivering Microsoft's NT operating system in early 1997. This action will seed the market for Novell and our partners to build revenue from cross-platform, value- added network services server replication, messaging, management, and security that use our directory as a foundation."

On the balance sheet, cash and short-term investments were slightly more than $1.0 billion, compared with $1.3 billion at October 28, 1995. During 1996, Novell repurchased 33 million shares of its common stock for approximately $450 million.

For fiscal year 1996, earnings were $0.35 per share on revenue of $1.4 billion, compared with $0.90 per share and $2 billion in fiscal 1995. Year-earlier results include revenue from discontinued or sold lines of business.

Founded in 1983, Novell (NASDAQ:NOVL) is the world's leading provider of network software. The company offers a wide range of network solutions for distributed network, Internet/intranet and small-business markets. Novell education and technical support programs are the most comprehensive in the network computing industry. Information about Novell's complete range of products and services can be accessed on the World Wide Web at http://www.novell.com.

Forward looking statements in this release are made under the Safe Harbor Reform Act of 1996. These statements are based on current expectations and actual results may differ materially due to risks, uncertainties, and other factors. Additional information covering factors that could cause results to differ materially from projected statements can be found in Novell's 10-K and 10-Q filings, as well as the annual report.

Founded in 1983, Novell (NASDAQ: NOVL) is the world's leading provider of network software. The company offers a wide range of network solutions for distributed network, Internet/intranet and small-business markets. Novell education and technical support programs are the most comprehensive in the network computing industry. Information about Novell's complete range of products and services can be accessed on the World Wide Web at http://www.novell.com.

Press Contact:
Peter Troop
408-577-8975
Internet: peter_troop@novell.com

Novell, Inc.
Consolidated Unaudited Condensed Statements of Income
(In thousands, except per share data)

                        Fourth
                 Fiscal Quarter Ended         Year Ended
                 Oct. 26,    Oct. 28,    Oct. 26,    Oct. 28,
                     1996        1995*       1996        1995*
               __________  __________  __________  __________
Net sales      $  383,666  $  480,519  $1,374,856  $2,041,174
Cost of sales      66,518     122,403     306,761     489,333
               __________  __________  __________  __________
Gross profit      317,148     358,116   1,068,095   1,551,841

Operating expenses
Sales and mktg.   143,236     142,183     518,846     579,370
Product dev.       66,926      94,957     275,627     367,562
General and
   administrative  38,668      43,668     146,236     152,800
Restructuring
   charges           --          --        18,442        --  
               __________  __________  __________  __________
Total operating
   expenses       248,830     280,808     959,151   1,099,732
               __________  __________  __________  __________
Income from
   operations      68,318      77,308     108,944     452,109
Other income,
   net             14,624      11,342      71,044      56,620
               __________  __________  __________  __________
Income
   before taxes    82,942      88,650     179,988     508,729
Income taxes       23,912      29,698      53,997     170,424
               __________  __________  __________  __________
Net income     $   59,030  $   58,952  $  125,991  $  338,305
               ==========  ==========  ==========  ==========

Weighted average shares
   outstanding    345,520     375,433     357,919     374,584
               ==========  ==========  ==========  ==========
Net income
   per share   $     0.17  $     0.16  $     0.35  $     0.90
               ==========  ==========  ==========  ==========

* Prior-year results include contributions from product lines that have since been
discontinued or sold.

Novell, Inc.
Consolidated Unaudited Condensed Balance Sheet
(In thousands)

                            Oct. 26,                  Oct. 28,
                                1996                     1995*
                          __________               __________
Cash and short-term
   investments            $1,024,755               $1,321,231
Receivables, net             452,327                  470,437
Inventories                   16,837                   23,025
Prepaid expenses              59,009                   50,576
Deferred income taxes         37,831                   59,913
                         ___________              ___________
Total current assets       1,590,759                1,925,182

Property, plant
   and equipment, net        394,684                  390,452
Other assets                  64,023                  101,196
                          ___________             ___________
Total assets              $2,049,466               $2,416,830
                          ===========             ===========


LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable          $   96,933               $  116,305
Accrued compensation          54,731                   97,637
Accrued marketing
   liabilities                48,402                   72,339
Other accrued
   liabilities               118,133                   90,623
Income taxes payable            --                     29,942
Deferred revenue              46,573                   54,099
                         ___________              ___________
Total current
   liabilities               364,772                  460,945

Minority interests            17,035                   17,623

Put warrants                  52,150                     --  

Shareholders' equity       1,615,509                1,938,262
                         ___________              ___________

Total liabilities and
   shareholders' equity   $2,049,466               $2,416,830
                         ===========              ===========

* Prior-year results include contributions from product lines that have since been discontinued or sold.

[an error occurred while processing this directive]